Comparison Between IFRS vs GAAP to Presentation of Account Receivables

Abstract

Three accounting issues related to accounts receivable are Recognition of accounts
receivable,Evaluation of accounts receivable and Write-off of accounts receivable. Assessing Accounts Receivable can affect Current Assets and Valuation (net realizable value. IFRS and GAAP are both international accounting standards used in preparing financial statements in various countries. Both aim to create quality financial reports that can be compared or harmonized, but both have differences. IFRS is a financial accounting standard that manage financial instruments with measure financial assets based on fair value (fair value). So, in measuring fair value at the end of each period reporting is seen whether there are indications an asset is impaired accounts receivable. Company goals adopt IFRS so that companies experienced improvement in quality accountancy. Impairment receivables will have an impact on the amount profit, where the loss is due to a decrease the value of accounts receivable will be reduce the profit reported by company. Based on this, then disclosure of information on decline value of accounts receivable in the report financial statements and notes finance is very important.Uncollectible Accounts Receivable occurs because a credit sale increases the likelihood of bad debts and the seller records a credit loss as a debit to Accounts Receivable Loss Expense (bad debt expense). IFRS uses principle-based..While GAAP uses rule-based. International accounting serves as a basis or guideline when transactions occur between countries. Whether as a comparison function, consolidation between subsidiaries, or alignment function.